Conditions favorable for cattle backgrounding and stocker operations this fall

OSU News Feed –

Many cattle producers are looking at current markets with interest, which currently
suggest opportunities for stockers or backgrounding this fall.

“Value of gain for added feeder cattle weight is largely a reflection of feedlot demand
for feeder cattle of various weights,” said Derrell Peel, Oklahoma State University
Cooperative Extension livestock marketing specialist.

For example, combined Oklahoma feeder auction prices in the first week of August for
465-pound steers were $171.59 per hundredweight. The price for 774-pound steers was
$150.65 per hundredweight. That works out to a value of gain of $1.19 per pound on
309 pounds of gain.

“A value of gain at this level indicates relatively less feedlot demand for lightweight
feeders and is an economic signal for increased stocker production,” Peel said. “If
feeder cattle prices maintain a similar price relationship into the fall and forage
conditions are good, fall feeder markets may follow traditional seasonal price patterns
rather closely.”

Oklahoma feeder cattle prices averaged nearly 4 percent above one year ago in the
first week of August with calf prices increasing from the previous week. Feeder prices
appear to be holding strong despite continued growth in feeder cattle supplies.

“Combined Oklahoma feeder auction totals have averaged 13 percent higher year-over-year
since early July,” Peel said. “National data for feeder and stocker cattle sales in
the month of July increased 7 percent compared to this time last year.”

Furthermore, the July Cattle Report estimated the 2018 calf crop to be nearly 2 percent
higher than 2017. Estimated feeder supplies on July 1 were 0.5 percent higher than
one year ago.

“All indications are that fall feeder markets will feature a calf run larger than
last year and abundant feeder supplies,” Peel said.

Prices for feeder cattle typically decline seasonally for all weight classes after
August. Calf and stocker cattle weighing up to 600 pounds typically have a seasonal
low price in October while heavier feeder cattle decline from an August peak …

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